The strange saga of Omnidrive continues. On Friday we reported that online storage service Omnidrive, once a market leader, had joined the deadpool after the site’s domain name expired. Further evidence was posted during the weekend by Omnidrive angel investor Clay Cook, who had invested $100,000 into the company. In a scathing post, Cook wrote that “I am 99% sure I will not receive a cent.” However, Omnidrive founder and CEO Nik Cubrilovic is – once again – claiming his company is not dead.
There has been a lot of unease about the Omnidrive situation, especially amongst a number of Australian startup people – who have been calling for someone to investigate Nik’s actions. It’s an awkward situation, because many of us know Nik personally (myself included). What’s more, the story hasn’t gotten the coverage that other deadpooled companies have. One reason is that TechCrunch’s Michael Arrington is an Omnidrive investor, something he has been very open about and which prevents him from commenting. So it is really up to the rest of us to do some digging.
As a start, I decided to send Nik an email and ask for his response – because Clay’s post had some serious allegations. Here is Nik’s response:
“The domain is up but it is taking a while for the DNS change to
propagate. It all started when I tried to change registrars in time
before the domain expiration, and I put the transfer request through
(to godaddy) and even though there was a confirmation it was never
completed. The renewal went through last night, and from here I can
see the site again but I can understand if it will take another 24
hours or so.
As for Clay’s comments – it is unfortunate that he posted what he did
in a public forum, as it doesn’t help my efforts or his efforts. I
think Clay was well aware of the risks of angel investing and was more
than willing to ride the situation to a sucessful outcome, but now
that he feels that we aren’t doing so well looks to make a quick exit.
You can’t have an angel investment where you can take all the
positives, but as soon as there is a negative decide to take a
risk-less way out and pull your money back. You either ride up or ride
down. I did contact clay and respond to his email enquiry, and was
hoping to convince him to help me through, but I didn’t hear anything
back. He specifically asked me not to call him, which I didn’t. I
don’t think it is particularly constructive for him to vent
publically, or for there to be knee-jerk reactions to any and every
error experienced on the site.
At the moment I am in the process of (along with 2 part-time
developers who are helping out) of testing and rolling out a new
version of the app. We ripped out our own backend and are utilizing
third-party storage services, as our biggest cost has been the
hardware we have had to opperate (and bandwidth bills). We first
talked about this a year ago, and it has taken since around December
to get the development to this point. Atm parts of it are live, and we
are utilizing S3, google and a few other services for the storage-end
(the users decide which services to use).”
What to make of all this? While I give credit to Nik for responding to RWW’s enquiries, I would guess that Clay Cook and others who have been burned by Omnidrive’s fate will not be satisfied by it. What’s more, there are a lot of unhappy users, judging by what I saw of the Omnidrive forums before the domain issue.
Perhaps we are beginning to see some of the downsides to web 2.0 here. I’ve met Nik several times and found him to be an intelligent, likeable guy. I can certainly understand why people invested in Omnidrive, as it was a promising company.
Yet it’s ended up a sad story. The online storage market, as we’ve pointed out before, became very tough once Amazon, Google and Microsoft all entered it. This story in many ways represents the ‘other side’ of the web 2.0 era – promising startup, the market didn’t quite pan out, yikes the angels and early employees lose out big time. No bigco buyout, more like a bigco bury.
Normally that’d be the end of the story – deadpool is the phrase that has become common in describing such a mess. The strange thing here is that the Omnidrive story isn’t over yet. Clay Cook and others have money owing to them, and have been loudly claiming that Omnidrive has done them wrong. Nik Cubrilovic indicated in his email that he’s done nothing wrong, and what’s more claimed that he is still desperately trying to make the company work. Which do you believe?
